Problem
Suppose that Hannah and Sam have the Cobb Douglas production function Q = F(L, K) = 10L0.25K0.25. Both a worker and a unit of capital cost $1,000 per week. If Hannah and Sam begin by remodeling 100 square feet per week, and if their capital is fixed in the short run but variable in the long run, what are their long-run and short-run cost functions? What are their long-run and short-run average cost functions for positive output levels?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.